I have a general Xbee related question. Which Xbee module is better and for what use, Xbee Sereis 1 or Xbee Series 2?What are their differences in terms of implementation?I need to set up an Xbee system with two wireless temperature sensors and looking for my best option between S1 and S2.

Which Xbee module is better and for what use, Xbee Sereis 1 or Xbee Series 2?

Neither is better. They are for different purposes. The Series 1 models are for point to point use. The Series 2 models are for creating networks of devices.

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What are their differences in terms of implementation?

Depends what you mean by implementation. The XBees needs to be configured (how depends on the series and what it is to do) and need to be connected to the Arduino, usually with a shield, since the XBees use different pin spacing.

Currently i have an Arduino UNO with Ethernet Shield and Xbee Shield. I want to receive the temperature from two(or more later on) wireless sensors and display the measured temperature on my laptop through the Ethernet shield.

If you go with S2 (now called XBee ZB), the low-power wire antenna model is a good one to start with, part number XB24-Z7WIT-004. XB24-Z7PIT-004, XB24-Z7SIT-004, XB24-Z7UIT-004 are equivalent, they just have different antenna options. The Pro models feature increased range and require significantly more power.